Apple saw a 57% surge in China sales over the December quarter, helping drive a record top line and much stronger-than-expected first quarter earnings.
Apple Inc. (AAPL) -Get Report posted stronger-than-expected first quarter earnings Wednesday, and its first print of revenues over $100 million, thanks in part to surging China sales and demand for its new iPhone 12.
Apple said profits for the three months ending in December, the tech giant's fiscal first quarter, were pegged at $1.68 per share, up 34.4% from the same period last year and well ahead of the Street consensus forecast of $1.41. Group revenues, Apple said, rose 21% from last year to a record $111.44 billion, again topping analysts' estimates of a $103.3 billion tally.
Greater China revenues surged 57% to $21.3 billion, Apple said, helping iPhone revenues rise 17% to an all-time high of $65.5 billion, thanks in part to the launch of its new iPhone 12 suite of smartphones late last year amid COVID-related disruptions to its global brick-and-mortar network of stores. Services revenue rose 24.2% to $15.8 billion, Apple said, with more than 620 million subscribers across all of its platforms.
Looking into the three months ending in March, Apple said its sees revenue growing on an year-on-year basis, but declined to provide detailed guidance for either sales or bottom line earnings. Gross margins, Apple said, will likely be flat on a quarter-to-quarter basis.
“This quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide,” said CEO Tim Cook. “We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season."
Apple shares were marked 2% lower in after hours trading immediately following the earnings release to indicate a Thursday opening bell price of $139.30 each, a move that would trim the stock's six-month gain to around 49%.
Mac sales, Apple said, rose 21.2% to $8.68 billion, while sales from its wearables, home and accessories division jumped 30% to $13 billion, "driven by holiday demand for the latest Apple watch," Cook said. iPad sales were up an astonishing 41% to $8.44 billion.
“Our December quarter business performance was fueled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices,” said CFO Luca Maestri. “These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash neutral position over time.
Cook said the gains helped lift its total installed base of devices past 1.65 billion, with more than 1 billion iPhones active and outstanding and records in each of its project categories.